Millionaires born out of crises, live of crises

Tesfaye Kebede (sidist kilo) — Reading Tedla Asfaw’s piece on ‘Millionaires were born out of Ethiopia’s famine’, which clearly showed how TPLF manipulated donation to build its business empire, I just wanted to reflect my view on similar issues.TPLF and it supporters have made millions out of almost every crises the country went through. A closer look at of the two crises: Famine and Foreign exchange, clearly shows how TPLF is profiting from these crises,which are mostly its owm makings-

Famine

The direct donation in the name of famine, which much of it goes to the pockets of TPLF and its inner circle supporters, aside the whole logistical issues that come along with it are business opportunities to enrich TPLF companies and loyal members. One of the clearest cases in this regard is to see how the food donation is being transported from the port to the beneficiaries. This is the area even The Reporter has admitted in its recent editorial. TransEthiopia, a sister company of EFFORT, which has an absolute monopoly in heavy freight transportation sector in Ethiopia is the biggest beneficiaries of famine. Almost all contracts to transport the food from ports to different distribution centers in the country are provided to this company with out bid. Even though there are other private companies which can provide the same or better service for a lesser price an insider dealing practice of the government awards all lucrative contacts to one of their own. As a result of this foreign donors are paying disproportionately high amount of their fund for transportation. By the time the food reaches the end users its total cost mostly is as much as twice the price of buying it at the local market.

Instead of giving other private owners an equal chance to do the business TPLF in many occasions has facilitated TransEthiopia, whenever it is unable to do it on its own, to subcontract for others at a significant amount of commission. A person I know, who is involved in transportation business once told me that this company received as much as 20% sub-contract commission form others. In the words of that person ‘ In this country we pay taxes twice: one for the government and another for TransEthiopia’. This is typical case of economic discrimination TPLF is purporting on other Ethiopians.

Foreign Exchange Crises

Following the international financial and economic crises Ethiopia has faced a severe shortage of foreign currency. At its worst time it had only left with less than one month’s required amount for the country’s import. But by the time the country was suffering from this crisis TPLF companies were literally making millions overnight. As we know very well TPLF companies have the preferential right to get access to the foreign exchange, which was even denied for those who import food and medical items. At the time when the price of every imported good is skyrocketing getting access to the hard currency is equivalent to winning a lottery.

Why is the price of imported items in Ethiopia increasing despite the fact that the price internationally is down or just getting stable? The answer is the very few who in one or the other way associated with TPLF and have the access to the foreign currency wanted to make disproportionate profit out of it. With no competition from others they can sell their imported products at the price they wish. This what TPLF companies and its associates are doing right now.

The difference between the official exchange rate and the black market exchange rate is ever increasing. If we take dollar as an example the difference between the two rates on average is at least 1 birr. This means anybody who has got the access to exchange at the official rate is getting 1 birr extra on each dollar exchanged. If we take the case of a company which is allowed to open letter of credit (LC) for one million dollars, with out considering the extraordinary profit they rip from the import, just by the time it is allowed to open the LC this company has made a million birr. The case presented here is a drop in the ocean. But, it clearly shows that TPLF through its companies and supporters is committing economic crimes on the very poor people it claims to represent.

Tesfaye Kebede can be reached at: Tesfayekebede69@yahoo.com

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Posted by ethioforum
on October 27, 2009. Filed under NEWS.
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